Question 1

Which of the following statements regarding reporting under GAAP and IFRS is not true:

Accepted Answer

A)  Both GAAP and IFRS define the initial asset value as historical cost for nearly all assets.
B)  The definition of an asset under GAAP and IFRS involves three basic criteria.
C)  Both GAAP and IFRS define the initial asset value as replacement value.
D)  The definition of a liability under GAAP and IFRS involves three basic criteria.
E)  After acquisition, one of two asset measurement systems is applied.

Question 2

The adjusted trial balance of Sara's Web Services follows:
  
(a)Prepare the closing entries for Sara's Web Services.
(b)What is the balance of Sara's capital account after the closing entries are posted?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Balance of Sara's capital acc...

Question 3

A ____________________ helps in preparing financial statements,is useful in preparing interim statements,and is helpful in showing the effects of proposed transactions.

Accepted Answer

The answer of A ____________________ helps in preparing financial statements,is...

Question 4

Shown below is Adventure Travel's adjusted trial balance as of the end of its annual accounting period:
Adventure Travel
Adjusted Trial Balance
December 31
  (a)Prepare the necessary closing entries.
(b)Prepare a post-closing trial balance.

Accepted Answer

(b)
Adventure Trave...

Question 5

A company has current assets of $15,000 and current liabilities of $9,500.Its current ratio is 1.6

Accepted Answer

A) True 
 B)False

Question 6

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

Accepted Answer

A)  Income Summary account.
B)  Closing account.
C)  Balance column account.
D)  Contra account.
E)  Nominal account.

Question 7

Harry's Bikes current assets are $400 million and its current liabilities are $250 million.Its current ratio is 0.63.

Accepted Answer

A) True 
 B)False

Question 8

The current ratio:

Accepted Answer

A)  Is used to measure a company's profitability.
B)  Is used to measure the relation between assets and long-term debt.
C)  Measures the effect of operating income on profit.
D)  Is used to help evaluate a company's ability to pay its debts in the near future.
E)  Is calculated by dividing current assets by equity. D

Question 9

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Accepted Answer

A)  Office Equipment.
B)  Accumulated Depreciation-Office Equipment.
C)  Depreciation Expense-Office Equipment.
D)  Ted Nash, Capital.
E)  Salaries Payable. C

Question 10

A work sheet is a substitute for the set of financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is incorrect?

Accepted Answer

A)  Permanent accounts is another name for nominal accounts.
B)  Temporary accounts carry a zero balance at the beginning of each accounting period.
C)  The Income Summary account is a temporary account.
D)  Real accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence.
E)  The closing process applies only to temporary accounts.

Question 12

The balances in the unadjusted columns of a work sheet will agree with:

Accepted Answer

A)  the balances reflected in the company's financial statements.
B)  the balances reflected in the company's unadjusted trial balance.
C)  whatever balances management has decided to report.
D)  the balances in the company's post-closing trial balance.
E)  the balances management budgeted for the accounting period.

Question 13

Closing entries are required:

Accepted Answer

A)  if management has decided to cease operating the business.
B)  only if the company adheres to the accrual method of accounting.
C)  if a company's bookkeeper forgets to prepare reversing entries.
D)  if the temporary accounts are to reflect correct amounts for each accounting period.
E)  in order to satisfy the Internal Revenue Service.

Question 14

Which of the following statements is incorrect?

Accepted Answer

A)  Working papers are useful aids in the accounting process.
B)  On the work sheet, the effects of the accounting adjustments are shown on the account balances.
C)  After the work sheet is completed, it can be used to help prepare the financial statements.
D)  On the work sheet, the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance.
E)  A worksheet is not a substitute for financial statements.

Question 15

The J.Godfrey,Capital account has a credit balance of $17,000 before closing entries are made.If total revenues for the period are $55,200,total expenses are $39,800,and withdrawals are $9,000,what is the ending balance in the J.Godfrey,Capital account after all closing entries are made?

Accepted Answer

A)  $ 8,000.
B)  $15,400.
C)  $23,400.
D)  $17,000.
E)  $32,400.

Question 16

All of the following regarding reversing entries are true except:

Accepted Answer

A)  Reversing entries are optional.
B)  Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the previous accounting period.
C)  Reversing entries are used to simplify a company's recordkeeping.
D)  Reversing entries are dated the first day of the new accounting period.
E)  Reversing entries are not the exact opposite of adjusting entries.

Question 17

Reversing entries:

Accepted Answer

A)  Are optional.
B)  Are mandatory.
C)  Correct errors in journal entries.
D)  Are required by GAAP.
E)  Are prepared on the worksheet.

Question 18

Bentley records adjusting entries at its December 31 year end.At December 31,employees had earned $12,000 of unpaid and unrecorded salaries.The next payday is January 3,at which time $30,000 will be paid.Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.

Accepted Answer

A)  Debit Salaries expense $12,000; credit Salaries payable $12,000.
B)  Debit Salaries expense $18,000; debit Salaries payable $12,000; credit Cash $30,000.
C)  Debit Salaries payable $18,000; credit Cash $18,000.
D)  Debit Salaries payable $12,000, credit Salaries expense $12,000.
E)  Debit Salaries expense $18,000; credit Salaries payable $18,000.

Question 19

The closing process takes place after financial statements have been prepared.

Accepted Answer

A) True 
 B)False  True

Question 20

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery.
  * $2,000 of the long-term note payable is due during the next year.

Accepted Answer

The answer of Based on the adjusted trial balance shown...

Exam 4: Completing the Accounting Cycle

Which of the following statements regarding reporting under GAAP and IFRS is not true:

Correct Answer
verified

The adjusted trial balance of Sara's Web Services follows: (a)Prepare the closing entries for Sara's Web Services. (b)What is the balance of Sara's capital account after the closing entries are posted?

Correct Answer
verified
Balance of Sara's capital acc...
View Answer

A ____________________ helps in preparing financial statements,is useful in preparing interim statements,and is helpful in showing the effects of proposed transactions.

Correct Answer
verified

Shown below is Adventure Travel's adjusted trial balance as of the end of its annual accounting period: Adventure Travel Adjusted Trial Balance December 31 (a)Prepare the necessary closing entries. (b)Prepare a post-closing trial balance.

Correct Answer
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(b)
Adventure Trave...
View Answer

A company has current assets of $15,000 and current liabilities of $9,500.Its current ratio is 1.6

Correct Answer
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The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

Correct Answer
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Harry's Bikes current assets are $400 million and its current liabilities are $250 million.Its current ratio is 0.63.

Correct Answer
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The current ratio:

Correct Answer
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D

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Correct Answer
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C

A work sheet is a substitute for the set of financial statements.

Correct Answer
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Which of the following statements is incorrect?

Correct Answer
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The balances in the unadjusted columns of a work sheet will agree with:

Correct Answer
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Closing entries are required:

Correct Answer
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Which of the following statements is incorrect?

Correct Answer
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The J.Godfrey,Capital account has a credit balance of $17,000 before closing entries are made.If total revenues for the period are $55,200,total expenses are $39,800,and withdrawals are $9,000,what is the ending balance in the J.Godfrey,Capital account after all closing entries are made?

Correct Answer
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All of the following regarding reversing entries are true except:

Correct Answer
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Reversing entries:

Correct Answer
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Correct Answer
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The closing process takes place after financial statements have been prepared.

Correct Answer
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True

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

Correct Answer
verified

Exam 4: Completing the Accounting Cycle

Which of the following statements regarding reporting under GAAP and IFRS is not true:

Correct AnswerverifiedShow Answer

The adjusted trial balance of Sara's Web Services follows: (a)Prepare the closing entries for Sara's Web Services. (b)What is the balance of Sara's capital account after the closing entries are posted?

Correct Answerverified Balance of Sara's capital acc...View AnswerShow Answer

A ____________________ helps in preparing financial statements,is useful in preparing interim statements,and is helpful in showing the effects of proposed transactions.

Correct AnswerverifiedShow Answer

Shown below is Adventure Travel's adjusted trial balance as of the end of its annual accounting period: Adventure Travel Adjusted Trial Balance December 31 (a)Prepare the necessary closing entries. (b)Prepare a post-closing trial balance.

Correct Answerverified (b)Adventure Trave...View AnswerShow Answer

A company has current assets of $15,000 and current liabilities of $9,500.Its current ratio is 1.6

Correct AnswerverifiedShow Answer

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

Correct AnswerverifiedShow Answer

Harry's Bikes current assets are $400 million and its current liabilities are $250 million.Its current ratio is 0.63.

Correct AnswerverifiedShow Answer

The current ratio:

Correct AnswerverifiedD

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Correct AnswerverifiedC

A work sheet is a substitute for the set of financial statements.

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

The balances in the unadjusted columns of a work sheet will agree with:

Correct AnswerverifiedShow Answer

Closing entries are required:

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

The J.Godfrey,Capital account has a credit balance of $17,000 before closing entries are made.If total revenues for the period are $55,200,total expenses are $39,800,and withdrawals are $9,000,what is the ending balance in the J.Godfrey,Capital account after all closing entries are made?

Correct AnswerverifiedShow Answer

All of the following regarding reversing entries are true except:

Correct AnswerverifiedShow Answer

Reversing entries:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The closing process takes place after financial statements have been prepared.

Correct AnswerverifiedTrue

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Balance of Sara's capital acc...
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(b)
Adventure Trave...
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D

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C

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True

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